Understanding Shares

When you buy a share you are buying part ownership of a business. Investors usually invest in shares because they offer the opportunity for capital growth, which is important if a portfolio is going to keep ahead of inflation.

Other investors, especially those in retirement look for income, so tend to focus on buying shares with high dividend yields.

Short term investors or traders look to take advantage of short term moves in share price to make a profit through capital gains.

Whichever way you want to approach being a share owner it is important that you gain an understanding of what is involved and this section provides an overview of some key topics to advance your understanding.

What do sharemarket terms mean?

Before you invest in the sharemarket it is important to understand some of the more common terms that are used.